Dr. Linus Nkan, the Commissioner for Finance in Akwa Ibom State, clarified that the N150b bill, which was approved by the House of Assembly, gave Governor Udom Emmanuel the ability to get a financial instrument rather than a loan.
During a telephone interview on Comfort FM’s breakfast show, Dr. Nkan stated unequivocally that Governor Udom Emmanuel’s request to the House of Assembly to raise funds from the financial market in order to execute some of the state’s capital projects was duly approved by the House of Assembly because the Governor had clearly explained the intent and purpose of the funds, which was to enable the government to complete the state’s ongoing projects.
The Commissioner, on the other hand, indicated that they were shocked by the outcry from a sector of the state over this, which he explained was due to a lack of understanding on the part of the people, who mistook it for a loan.
He went on to say that the money isn’t a loan because it doesn’t impose any obligations on the state government.
The state government is not responsible for any of the debt repayment.
The loan will not be repaid using ISPO, which is the traditional method for repaying a loan, because this instrument has no ISPO at all.
And it has no impact on the state government’s revenue, either directly or indirectly.
It was determined that the state government had a sum of money that should be refunded to it through the federal account to all of Nigeria’s Niger Delta states.
A committee was formed, and its recommendation was that some money is returned to the oil-producing states.
The Federal Government admitted that these funds, estimated to be in the region of $150 billion (Akwa Ibom’s share), should be refunded to them, but that they would have to do so piecemeal due to a lack of funds. As a result, they decided to distribute the funds to the beneficiary states on a quarterly basis over a five-year period.
Dr. Nkan went on to say that the state government decided to raise an instrument to get this money from a financial institution to get a Lomb sum of money that will give the value of the money now to be used for the purpose it is needed in anticipation of any inflation that may arise as a result of the ongoing war between Russia and Ukraine, which could affect construction costs.
However, for a period of five (5) years, the financial institution will receive from the Federal Government what is owed to Akwa Ibom State on a quarterly basis.
The state government followed due process, according to the Honourable Commissioner, because the AKHA was well briefed on the topic, which is a crucial manner of expressing the government’s financial objectives to the public.
He also stated that all of these actions were taken in anticipation of the federal government beginning to pay this money, not as if the money was readily available.